By Theopolis Waters
CHICAGO, April 9 (Reuters) – Chicago Mercantile Exchange live cattle futures gained slightly on Thursday, reversing initial selling aided short-covering and futures’ discounts to last week’s cash prices, traders said.
April ended 0.250 cent per pound higher at US161.800 cents, and June finished up 0.125 cent at 151.575 cents.
On Thursday, a packer in Kansas cut bids for market-ready, or cash, cattle to $163 to $164 per hundredweight (cwt) from $164 to $165 on Wednesday, industry sources said. Asking prices held steady in the state and elsewhere in the U.S. Plains at $170, they said.
Bullish traders expect packers that need cattle will pay the same as they did for supplies last week and pass on some of that cost to grocers looking to feature beef for spring grilling.
Market bears said processors curbed kills to improve their margins and boost wholesale beef values while waiting for seasonal supply growth.
On Thursday, packers processed 98,000 head of cattle, down 5,000 from last week, according to the U.S. Department of Agriculture.
The morning’s Choice wholesale beef price dropped 76 cents per cwt. from Wednesday to $258.38. Select cuts rose $1.55 to $252.60, the USDA said.
CME feeder cattle settled firm on technical buying and modest live cattle market advances.
April closed up 0.250 cent per lb. at 216.475 cents.
NARROWLY MIXED HOG CLOSE
CME lean hogs ended mixed after investors sold April futures before they expire on April 15 and bought May led by firmer cash prices.
April closed down 0.200 cent per lb. at 62.100 cents, but May ended up 0.275 cent at 70.500 cents.
Government data showed the morning’s average cash hog price in Iowa/Minnesota was $58.95 per cwt., up 43 cents from Wednesday.
Packers raised bids for hogs in parts of the Midwest where supplies have became harder to come by.
Thursday morning’s USDA monthly supply-demand report confirmed the government’s recent quarterly hog survey that implied increased pork production for 2015, which weighed on hog futures.
A forecast 120 million lb. rise in pork production in 2015, a 225 million lb. pork import increase and minor changes in other categories means “the U.S. consumer will have an extra 340 million lb. to eat through,” said Allendale Inc chief strategist Rich Nelson.